Retailers Angry Over
Rates Hikes
AS retailers experience rising rates bills, as part of
a nationwide revaluation process, Retail News asks if
the system is in need of reform.
10 years ago, Peter Gaughan undertook a
€750,000 revamp of his petrol station and shop
in Balla, County Mayo. The Spar shopkeeper
demolished the forecourt and built a bigger outlet
on the same footprint in an attempt to improve his
business. When the Valuations Office took note of
his renovations, however, they doubled his rates,
according to Gaughan. “This is just one scenario
where you get punished for investing in your
business,” he told Retail News.
It's a story that retail representatives hear a lot.
“A store owner increases the visual amenity in an
area and they are hit with an increased valuation,”
said Vincent Jennings, Chief Executive of the
Convenience Stores & Newsagents Association
(CSNA).
Tara Buckley, Director General of RGDATA, also
has members “who have purchased an old derelict building,
renovated it, spent money on it, and turned it into a business
as shops close all around them in the town. Then the rates bill
arrives through the door. When they are among the last people
standing, keeping the town alive, their rates bill jumps up.”
The thorny issue of rates is back in the spotlight in
2019. Local authorities around the country are revaluing
commercial properties
as part of the first
National Revaluation
Programme in over
150 years. Thus far,
the programme has
been completed in
counties that include
Carlow, Kildare, Sligo,
and Dublin. Attention
is now turned toward
Cavan, Louth, and
Wexford, amongst
others. But the process
appears to be driving
massive hikes in rate
bills.
Vincent Jennings, Chief Executive
Thomas Burke,
of the Convenience Stores &
Director of Retail
Newsagents Association.
Ireland, has received
reports from his
members about increases in the order of 50% to 60%. “It's
giving a real headache to business operators from the
perspective of trying to foresee what a bill may be in a given
year,” he said. RGDATA members are experiencing the same
concerns. “They are frustrated about paying high commercial
rates when the towns are not being managed properly,” said
Tara Buckley.
Retailers believe that rates are inconsistent with business.
“At the moment, the rates are based upon the rentable value of
the shop, which is very arbitrary,” said Gaughan.

According to Jennings, “a multinational who uses a
building as an extension of its own brand should have a
different value on their high street property than a person
selling newsagent products. Somebody who has 2,000
customers a week is in a different position to someone has
200.”
Buckley continued: “A convenience grocer needs to have a
certain amount of square footage. Immediately, they are going
to be at a disadvantage to other retailers in the town because
they have a bigger space, even though their margins are
extremely tight. Upstairs could be an online business. They are
paying tiny rates because they only need a small space, but they
could be turning over a huge amount of money.”
“It's not an efficient system,”
said Burke. “It's an opaque system.
These anomalies on paper are
having a real impact on the viability
of our member companies and their
businesses all over Ireland.”
How are commercial rates
calculated? The valuation of the
property, known as the Net Annual
Value (NAV) is multiplied by an
Annual Rate on Valuation (ARV),
which is set by local authorities.
Retailers contend this system does
not take into account the needs of
individual properties, which may
be subject to rent reviews. Retail
Tara Buckley, Director
Ireland has called for a centralised
General of RGDATA.
collection agency to collect rates,
bringing a national perspective to the problem.
Retailers suspect the system unfairly disadvantages
their businesses, and their rates are being increased to make
up for non-payments. Less than 80% of commercial rates
are collected nationally every year, leaving a hole of around
€200m, according to Burke. “That drives inefficiencies in the
system. People pay more than they should because they have